A)
| Because the cash payment will happen in the future, the forward interest rate reflects the creditworthiness of the party which is long the FRA. |
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B)
| If the floating rate at contract expiration is greater than the rate specified in the FRA, the long position will receive a payment. |
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C)
| If the floating rate at contract expiration is less than the rate specified in the FRA, the right to lend at rates higher than market rates has a positive value. |
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